Opinion: Alphabet’s Waymo is winning the race for self-driving cars — and Apple is far behind

Self-driving cars have always been a subject of popular debate among consumers and investors alike. But lately, the technology — and the profit potential — has started to feel very real.

This week, shares of Avis Budget Group Inc.
CAR, -5.04%
surged after Alphabet Inc.
GOOG, -3.91%GOOGL, -3.82%
announced it will partner with the company to support and maintenance its fast-growing fleet of self-driving vehicles. Avis gets a regular paycheck for its services in the multiyear deal, and Alphabet’s Waymo arm gets access to thousands of vehicles and millions of potential customers in its effort to move forward with its autonomous driving dreams.

The laggards in the field, meanwhile, are still just testing their tech in labs and controlled settings.

Out of all the self-driving players in the world, Alphabet (also Google’s parent) seems like a clear No. 1 to me. But who is speeding toward a self-driving future to challenge them? And who is disappointing investors and falling behind, destined to be left in the dust?

Here’s a rundown of some of the other major players in the autonomous driving space right now, and what their outlook is:

Speeding ahead

Baidu

China tech giant Baidu Inc. ADR
BIDU, -2.06%
is often called the “Google of China” by investors. The company has lived up to that moniker not just through its internet dominance, but also by a push into autonomous vehicles.

For me, Tesla Inc.
TSLA, -0.24%
became the de facto leader in self-driving technology in 2016 after “Bill’s Mom” became an internet sensation by freaking out in the driver’s seat of a Model S on Autopilot. And with its self-driving hardware including cameras and sensors coming standard on every model it produces, Tesla clearly is diving headfirst into the future of self-driving cars.

To be clear, Autopilot is still only semiautonomous — as tragically evidenced by a recent fatal crash where the driver was warned seven times to put his hands on the wheel but didn’t take back control. But unlike competitors that are experimenting with self-driving technology at a small scale or in controlled settings, Tesla is perhaps the company closest to a real-world rollout of truly autonomous driving technology since it is a one-stop shop and can largely go it alone.

The consumer market may be larger and perhaps more lucrative, but don’t discount the potential of being a player in the world of autonomous freight and logistics. Daimler said its gear could be ready for prime time by 2020, presuming the legal framework is in place for such technology. That could be a game changer for businesses as well as individual drivers.

Falling behind

Apple

While Apple Inc.
AAPL, -3.96%
isn’t quite as far along as Google in its self-driving-car efforts, the company did announce this week that it will partner with Hertz Global Holdings Inc.
HTZ, -1.27%
to test autonomous technology of its own. But details showthe deal is for a measly few SUVs, hardly an impressive ramp to the half-dozen other vehicles Apple has been testing in California for the past year.

While there has long been speculation on an Apple Car under the code name Project Titan, it has become increasingly clear that the tech giant is more focused on artificial intelligence and software, despite its hardware roots. Costly overhead and a lack of tangible results have caused some investors to question whether Apple will ever deliver, and investors who have already been biting their nails over the high-stakes iPhone launch this year may not want to give Tim Cook & Co. leeway on this project for much longer.

Uber

Early backers of yet-to-IPO Uber have long seen the promise of self-driving taxis. But the high hopes of previous years has given way to more sordid dramas and practical challenges that are making innovation in 2017 more difficult. That includes the ouster of CEO Travis Kalanick amid allegations of sexual misconduct at the highest levels of the company, but it also includes the bottom-line practicalities of increased competition from competitors like Lyft that have stepped up recently.

For a young company like Uber that’s still bleeding cash, it’s risky to plow money aggressively into self-driving cars even as it still trying to assert its dominance in the nascent arena of ride sharing. Adding fuel to the fire is a late-2016 rollout of autonomous driving tests in Pittsburgh that soured in a hurry, leaving local politicians and community leaders questioning the wisdom of continuing the experiment.

Uber may have a lot of smart people and a good launchpad for self-driving cars, but it also has some serious challenges that it needs to sort out before it worries about where autonomous driving technology will be in a decade’s time.

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